Existing Home Sales Exceed Expectations:
Sales of previously occupied homes surprised economists by beating economic and market estimates. According to the National Association of Realtors, June Existing Home Sales beat estimates by 190,000 units. The annualized rate came in at 5.37 million units vs. consensus estimates of only 5.18 million units.
This is the first reading since the housing tax credit has expired, so it is a positive sign that we surprised to the upside. The month-over-month numbers for June were actually down 5.1% but the year-over-year numbers showed an increase of 9%!
EU Bank Stress Tests:
Only 17 out of the 91 European Union’s banks failed their stress test. The ultimate goal of the stress test was to give the global markets more confidence in the EU. The results were released last week and so were the criteria. No one expected the criteria to be so tough.
These tests ran a bank’s balance sheets through a series of worse case scenarios. A bank fails the stress test if its Tier-1 capital ratio is below 6% under two scenarios: Adverse scenario and adverse scenario plus sovereign risk. The adverse scenario assumes that the bank must face an economic climate that is so severe that it is only experienced once in 20 years. The same tests in the U.S. last year assumed a once in seven year possibility. These tests assumed a further decrease of 6% in unemployment from current levels and a 6% hike in interest rates from current levels.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -13 basis points last week which caused 30 year fixed rates to increase for both government and conventional loans. We briefly saw our best pricing of the year on Wednesday but then lost -38 basis points from that level by Friday’s close as the stock markets started to make up some lost ground and we received better than expected Initial Jobless Claims Data, Existing Home Sales, and Leading Economic Indicators.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Contact Colorado Mortgage Guy
Plum Creek Funding, Inc.
303-818-0699 (Cell)
303-840-0966 (Office)
877-840-0965 (Fax)
www.coloradomortgageguy.com
www.plumcreekfunding.com
vince@coloradomortgageguy.com
19519 E. Parker Square Dr. Parker, CO 80134
If you enjoyed this article, please consider sharing it!
Foreclosure Rates Fall Again:
U.S. foreclosure rates fell for the third straight month according to RealtyTrac’s new report. New foreclosure fillings in June dropped 2.81 percent from the previous month and 6.98 percent from the previous year.
While foreclosure rates are falling, they are still at high levels with 16 straight months of readings of over 300,000. Still 410 out of every 411 homes are not in foreclosure, so there is still some strength in the housing market.
Consumer Prices Continue to Fall:
Consumer Prices fell for the third straight month, providing bargains for American Shoppers.
The Consumer Price Index, the government’s most closely watched inflation barometer, dipped 0.1 percent in June, according to the Labor Department. Less expensive energy bills were a big factor behind the drop. Prices for food items and airline fares also dropped last month. Also, ”core” consumer prices are holding near a 44 year low.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +44 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. Rate declined on the back of some weaker than expected economic data. Manufacturing Data, Consumer Price Index and Consumer Sentiment all were much worse than market expectations. Economic concerns helped to push investors towards purchasing MBS as a way to earn low yields in exchange for safety that you cannot find in the stock markets.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Contact Colorado Mortgage Guy
Plum Creek Funding, Inc.
303-818-0699 (Cell)
303-840-0966 (Office)
877-840-0965 (Fax)
www.coloradomortgageguy.com
www.plumcreekfunding.com
vince@coloradomortgageguy.com
19519 E. Parker Square Dr. Parker, CO 80134
If you enjoyed this article, please consider sharing it!
President Signs 3-Month Extension of Tax Credit
On Friday, President Obama signed a law giving home buyers three extra months of the wildly popular tax credit that gives first-time home buyers $8,000 and previous owners $6,500. These only apply to primary residences.
The catch? This still only applies to purchase contracts that were executed prior to the April 30th deadline. This just gives those individuals extra time to close. It does not enable today’s signed contracts to qualify.
Unemployment Rate Drops:
The Unemployment Rate unexpectedly dropped from 9.7% to 9.5% in June. The very closely watched Non-Farm Payrolls grew 42,000 after stripping away the temporary Census workers hired by our government.
Even though the headline Unemployment Rate dropped, the financial markets did not welcome the news. The private sector just barely held its head above water with very small job growth. Many economists and traders believe the number was skewed lower by a large number of people no longer looking for work. Remember, the Unemployment Rate is a survey of those that are actively looking for work and can’t find it.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +42 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. Rate declined on fears of a U.S. double-dip recession. Economic concerns help to push investors towards purchasing MBS as a way to earn low yields in exchange for safety that you cannot find in the stock markets.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Brought to you by:
Plum Creek Funding
Office: 303-818-0699
info@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
If you enjoyed this article, please consider sharing it!
June 28, 2010
The Housing Market Update
Plum Creek Funding Inc
Brought to you by:
Plum Creek Funding
19519 E Parker Square Dr
Parker, CO 80134
www.plumcreekfunding.com
Mortgage Rates Drop to Record Low:
30 year fixed mortgage rates dropped to their lowest levels in 39 years according to a new survey released by Freddie Mac, the second largest mortgage finance company.
Interest rates on 15 year fixed rates and hybrid adjustable rate mortgage rates reached fresh lows as well. While record low rates and high housing affordability helped the housing market gain ground over the last year, the sector is struggling since the popular home buyer tax credit expired on April 30th.
According to a Freddie Mac survey, the average 30 year fixed rate for conventional (non-FHA and VA) mortgages averaged 4.69 percent for the week ended June 24th and is the lowest since Freddie Mac started the survey in April 1971. Still, Freddie Mac’s data is at least a week old before they publish it and it has been another week since then. Rates do vary depending on credit, debt ratios, down payment, area of the country, property type, points paid and many more factors.
GDP, Economy Grow at Slower Pace in 1st Quarter:
U.S. economic growth was slower than previously estimated in the first quarter of 2010. In its final estimate, the Commerce Department said the Gross Domestic Product (GDP) expanded at a 2.7% annual rate instead of the 3% pace it reported last month.
Although the growth pace was below market expectations it still marked three straight quarters of of expansion as our economy digs out of its most brutal downturn since the 1930s.
The Federal Reserve left their key interest rates unchanged this week and struck a cautious note on the economy and said that the recovery was “preceding” and that the economy is not expected to to fall back into a recession. Fears of a “double-dip” recession is one of the factors that have kept mortgage rates so low.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +62 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. Rate declined on the heals of a a slow down in existing and new home sales and a downward revision in our GDP.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Brought to you by:
Plum Creek Funding
Office: 303-818-0699
info@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.coloradomortgageguy.com
www.plumcreekfunding.com
If you enjoyed this article, please consider sharing it!
Tax Credits May See Extension:
The home buyer’s tax credit has been wildly popular. It gave both first time and previous home buyers a sizeable tax credit provided that they sign a purchase contract no later than the end of April and close no later than the end of June.
It was so successful, that pending home sales (contracts signed but not yet closed) rose 22.4% when compared to April 2009. However, with increased underwriting turn times, many people that met the requirement by signing a contract before the end of April will not be able to close in time. Under the current law, they would lose their tax credit.
Senator Harry Reid is offering an amendment to the American Jobs and Closing Tax Loopholes Act of 2010 that would extend the closing time from June 30th to September 30th. Note: If you did not sign a contract by April 30th then there is no extension for you. It is only for those that signed a contract in time but just can’t close on time. It remains to be seen if his proposal will pass, I will keep you posted.
Consumer Confidence Reaches a High Point:
According to a newly released report by Reuters/University of Michigan, their Consumer Confidence index rose again to a reading of 75.5. This is the best reading this year and the best reading since January 2008.
It shows a picture that consumers are more confident in how they perceive their economic outlook. A higher consumer confidence number generally signifies that consumers are more willing to spend. This is important because consumer confidence is one of the largest factors in home demand.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -35 basis points last week which caused 30 year fixed rates to increase for both government and conventional loans. We did have a large swing in the middle of the week that helped us to reach another new low in mortgage rates. But we very quickly gave up those gains to close down for the week.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Brought to you by:
Plum Creek Funding
Office: 303-818-0699
info@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.coloradomortgageguy.com
www.plumcreekfunding.com
If you enjoyed this article, please consider sharing it!
Homebuyer credit may be extended
With the cutoff to qualify for a federal tax credit fast approaching, Congress wants to delay the deadline for consumers scrambling to close transactions.
By The Wall Street Journal
Congress is considering an extension for would-be homebuyers who are racing to close home sales in order to receive a federal tax credit.
The real-estate industry has warned that tens of thousands of buyers who rushed to buy homes to qualify might not close before the deadline imposed by Congress, meaning they could miss out on receiving credits worth thousands of dollars if lawmakers don’t act.
Congress last fall extended an $8,000 tax credit for first-time homebuyers and added a smaller $6,500 credit for current homeowners who were buying a primary residence. To qualify for the credit, buyers had to sign purchase contracts by April 30 and must close on the transaction by June 30.
Read entire article at: http://articles.moneycentral.msn.com/Banking/HomeFinancing/homebuyer-tax-credit-deadline-may-be-extended.aspx
Brought to you by:
Plum Creek Funding
Office: 303-818-0699
info@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
If you enjoyed this article, please consider sharing it!
Pending Home Sales Surge
A pending home sale is simply a signed contract on a home that has not yet closed. The National Association of Realtors reported that we continued to see gains in home sales for the third consecutive month. The index rose 6.0% last month and 22.4% when compared to April 2009. The April increase follows a 7.1% in March and a 8.3% increase in February.
While certainly some of the gain can be attributed to the rush to get a contract signed prior to the end of the tax credit, there is definitely underlying demand as consistently low rates and increased consumer confidence in the housing market has helped to drive up demand for homes.
Unemployment Rate Drops:
The Labor Department reported that our nation’s unemployment rate dropped from 9.9% to 9.7%.
Non-farm payrolls increases 431,000 in May. However, 390,000 new hires were due to the wave of census hiring. That means that only 41,000 private sector jobs were created. While this is an improvement, it was certainly much less than market expectations and a further sign that our recovery isn’t as hot as once believed.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +69 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans and pushed mortgage rates to match the year’s best levels. The better mortgage rates were due to very mild economic data and continued concern over debt and banking issues in the European Union.
What to Watch Out For This Week
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Brought to you by:
Plum Creek Funding
Office: 303-818-0699
info@plumcreekfunding.com
19519 E Parker Square Dr
Parker, CO 80134
www.coloradomortgageguy.com
www.plumcreekfunding.com
If you enjoyed this article, please consider sharing it!
